Winter 2010
Final Rule on Safe Harbor Announced
The U.S. Department of Labor issued its final rule on the safe harbor for depositing employee contributions to retirement plans that have fewer than 100 participants.
Currently, employers of all sizes must deposit participant contributions in retirement plans as soon as they can reasonably be segregated from the employer’s general assets, but no later than the 15th business day of the month following the month in which contributions are received or withheld by the employer.
The final rule amends the plan asset regulation to create a safe harbor in which participant contributions to a small plan will be deemed in compliance if amounts are deposited in the plan within 7 business days of receipt or withholding. This is consistent with the rule proposed in 2008.
The safe harbor rule, effective as of January 14, 2010, is at http://tinyurl.com/SafeHarborRule.
